IAG NZ, the country's largest insurer, is calling for a clear government roadmap over the next 15 years, warning that natural hazard risk is growing faster than the system's ability to manage it.
New Zealand's largest general insurer is warning that the country faces a growing mismatch between the scale of natural hazard risk and the system in place to manage it — and is calling on the government to develop a coherent 15-year roadmap to address the problem.
IAG NZ, which trades under the AMI, State, NZI, Lumley and Lantern brands and provides general insurance products sold through ASB, BNZ and The Co-operative Bank, released a report this week arguing that New Zealand's current approach to natural hazard risk reduction has developed in an "indirect, ad hoc and piecemeal way" and is now "complex, fragmented, and incomplete."
The warning comes against a backdrop of steep increases in insurance premiums that have far outpaced general inflation.
The cost trajectory
Since 2000, the price of house insurance in New Zealand has increased 916% — a figure cited by consumer advocacy organisation Consumer NZ as the largest price rise for any goods category monitored by the Consumers Price Index over 25 years. Insurance premiums have also increased at three times the rate of CPI inflation since 2011, according to the IAG report.
IAG NZ chief executive Phil Gibson said the problem was solvable but required coordinated action. "This problem is solvable, but there are pieces of the puzzle that must be added to our current approach if we are to do a better job of reducing risk."
The report identified 42 gaps and future needs across how New Zealand builds, plans for, and finances natural hazard risk — spanning the planning system, building frameworks, infrastructure standards, and risk disclosure requirements.
What the roadmap would cover
IAG has proposed a possible 15-year roadmap that would give councils, businesses, and households clearer direction on managing natural hazard risk. Key themes include where and what gets built in hazard-prone areas, minimum standards for resilience across the lifecycle of assets, and mechanisms to fund large-scale adaptation.
The core argument is that without a coherent long-term plan, well-intentioned policies and reforms cannot be prioritised, aligned, or sustained over time.
For property owners, the practical implications are significant: insurance costs have been rising fastest in areas with the highest exposure to natural hazards, and that trend is expected to continue unless the underlying risk is reduced.
What this means for homeowners
The report's findings underline the relationship between physical risk exposure and insurance affordability. Properties in areas with high natural hazard exposure face both higher insurance costs and potential future availability issues — a dynamic that has been playing out in parts of the country for several years.
Understanding the risk profile of a property before purchasing is increasingly part of responsible homeownership decision-making, even if it does not change the fact that insurance is a necessary cost for most New Zealanders.
This article is for general information only and is not personalised financial advice. Seek advice from a licensed financial adviser (registered on the FSPR) for guidance specific to your situation.